Random, Abbreviated Note On Global Refining -- July 11, 2015

Some nice data points regarding global refineries. Apparently a lot of capacity has come on-line this past and more to come. Bakken.com is reporting:

"In 2015-2016, net capacity additions will be more than needed, which will cause the global utilization rate to decline, and casts a doubt on the continuation of current unusually high refining margins,” the IEA said in its monthly report.

The bulk of the new capacity is coming in the United States, where refineries are adding pieces of equipment to enable them to process more oil from the shale boom, and also from China.

In the Middle East, ADNOC’s Ruwais refinery in Abu Dhabi is set to join two 400,000 barrels per day (bpd) mega units that officially launched in Saudi Arabia in 2014.

The IEA estimates that global refining capacity will rise by 1.1 million bpd per year in 2015 and 2016, bringing worldwide capacity to just over 97 million bpd – a 2 percent increase.

While some closures are already planned in Europe and Asia, the agency no longer thinks these will be enough to balance the new additions.

By the way, did you catch that part about Saudi's two new 400,000 bopd megaunits? That's another reason Saudi needs to increase production. I think some analysts are forgetting that. 

And the Ruwais refinery: From TradeArabia:

State-owned Abu Dhabi National Oil Co (Adnoc) is expected to ramp up run rates and have all of the units at its newly expanded Ruwais refinery operating by June (2015), industry sources said.

The expanded refinery, which is currently running at close to 60 per cent of capacity, aims to start up a residual fluid catalytic cracking (RFCC) unit and a hydrocracker unit by the end of April, one of the sources familiar with the matter said.

Once the units start up, Adnoc will ramp up its operating rate to near 100 per cent by processing more crude oil at the end of April before scaling back to about 80 to 90 per cent of its capacity by June, the source added.

The expanded refinery will more than double the capacity from 415,000 barrels-per-day (bpd) and process the flagship Murban crude oil grade.

More than double 415,000 bopd sounds an awful lot like one million bopd.

Every time you read about Saudi et al increasing production, remember, a lot of this oil is for its own refineries.  

By the way, once gasoline production from the RFCC unit is stable, Adnoc will no longer need to import gasoline and the country will be well-balanced. It might even have about 845,000 to 1.69 million barrels a year to export.

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Planning Ahead

Our two oldest granddaughters are 12 and 9 years old. The nine-year-old, all of a sudden it seems, has taken an interest in putting together a killer wardrobe. She is quite artistic, knows what she is doing, and plans well ahead.

Today, while out shopping with their grandmother, the nine-year-old told her older sister that from now on, she (the nine-year-old) needs to be involved in all clothing purchases by her 12 year-old-sister since she will eventually get them as hand-me-downs.